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BMO Financial Group Reports Fourth Quarter and Fiscal 2023...
BMO Financial Group Reports Fourth Quarter and Fiscal 2023 Results
BMO's 2023 audited annual consolidated financial statements and accompanying Management Discussion and Analysis (MD&A) are available online at www.bmo.com/investorrelations and at www.sedarplus.ca.
Financial Results Highlights
Fourth Quarter 2023 Compared with Fourth Quarter 2022:
1, 321, 2, 31, 34Fiscal 2023 Compared with Fiscal 2022:
1, 321, 2, 31, 31, 3Adjusted 1, 3 results in the current quarter and the prior year excluded the following items:
TORONTO, Dec. 1, 2023 /PRNewswire/ -- For the fourth quarter ended October 31, 2023, BMO Financial Group (TSX: BMO) (NYSE: BMO) recorded net income of $1,617 million or $2.06 per share on a reported basis, and net income of $2,150 million or $2.81 per share on an adjusted basis.
"Our results this year reflect the fundamental strength and diversification of our businesses. Driven by record revenue and ongoing momentum in Canadian Personal and Commercial Banking and the contribution of Bank of the West, we delivered strong performance in a challenging economic backdrop," said Darryl White, Chief Executive Officer, BMO Financial Group.
"This year, we made significant progress against our strategic priorities to continue to grow and strengthen our bank, completing three notable acquisitions, advancing our Digital First capabilities and delivering interconnected One Client experiences. With the successful conversion of Bank of the West, BMO is the most integrated north-south bank on the continent. Our relentless focus on putting customers first and supporting their financial goals with innovative digital experiences and expert guidance continues to be recognized, including being ranked first by J.D. Power 5 for Personal Banking Customer Satisfaction among the Big 5 Banks in its 2023 Canada Retail Banking Satisfaction Study.
"Looking to 2024, we have proactively positioned the bank for future growth and are confident that our dynamic expense and capital management actions and ongoing targeted investments will drive consistent and differentiated performance. At BMO we are leveraging our position as a leading financial services provider to put our Purpose into action and help our clients and communities make progress for a thriving economy, sustainable future and an inclusive society," concluded Mr. White.
Concurrent with the release of results, BMO announced a first quarter 2024 dividend of $1.51 per common share, an increase of $0.04 from the prior quarter and an increase of $0.08 or 6% from the prior year. The quarterly dividend of $1.51 per common share is equivalent to an annual dividend of $6.04 per common share.
Caution
The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
| (1) | Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed for all reported periods in the Non-GAAP and Other Financial Measures section. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms. |
| (2) | All EPS measures in this document refer to diluted EPS, unless specified otherwise. |
| (3) | Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items. |
| (4) | The CET1 Ratio is disclosed in accordance with the Office of the Superintendent of Financial Institutions' (OSFI's) Capital Adequacy Requirements (CAR) Guideline. |
| (5) | For more information, refer to www.jdpower.com/business. |
| Note: All ratios and percentage changes in this document are based on unrounded numbers. | |
Recent Acquisitions
On February 1, 2023, we completed our acquisition of Bank of the West, including its subsidiaries, from BNP Paribas. Bank of the West provides a broad range of banking products and services, primarily in the Western and Midwestern regions of the United States. The acquisition strengthens our position in North America with increased scale and greater access to growth opportunities in strategic new markets. We completed the conversion of Bank of the West customer accounts and systems to our respective BMO operating platforms in September 2023. The acquisition has been reflected in our results as a business combination, primarily in the U.S. P&C and BMO Wealth Management reporting segments.
On June 1, 2023, we completed the acquisition of the AIR MILES Reward Program (AIR MILES) business of LoyaltyOne Co. The AIR MILES business operates as a wholly-owned subsidiary of BMO. The acquisition was accounted for as a business combination and the acquired business and corresponding goodwill are included in our Canadian P&C reporting segment.
For more information on the acquisition of Bank of the West and AIR MILES, refer to Note 10 of the audited annual consolidated financial statements.
Caution
The foregoing section contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Fourth Quarter 2023 Performance Review
Adjusted results and ratios in this section are on a non-GAAP basis. Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items. The order in which the impact on net income is discussed in this section follows the order of revenue, expenses and provision for credit losses, regardless of their relative impact.
Reported net income was $1,617 million, a decrease of $2,866 million or 64%, and adjusted net income was $2,150 million, an increase of $14 million or 1%. The inclusion of Bank of the West results in the current quarter decreased reported net income by $317 million, and increased adjusted net income by $195 million. Adjusted results excluded the items noted above. Reported EPS was $2.06, a decrease of $4.45, and adjusted EPS was $2.81, a decrease of $0.23, including the impact of common share issuances in the first quarter of 2023.
Canadian P&C
Reported net income was $962 million, an increase of $45 million or 5% from the prior year, and adjusted net income was $966 million, an increase of $49 million or 5%. Results reflected a 13% increase in revenue, due to higher net interest income driven by higher balance growth and margins, and higher non-interest revenue, partially offset by higher expenses and a higher provision for credit losses.
U.S. P&C
Reported net income was $661 million, an increase of $1 million from the prior year, and adjusted net income was $740 million, an increase of $78 million or 12% from the prior year. The impact of the stronger U.S. dollar increased net income by 1%.
On a U.S. dollar basis, reported net income was $486 million, a decrease of $2 million or 1% from the prior year. Adjusted net income, which excluded amortization of acquisition-related intangible assets, was $543 million, an increase of $54 million or 11% due to inclusion of Bank of the West, partially offset by a decrease in underlying revenue primarily due to lower net interest income, higher expenses and a higher provision for credit losses.
BMO Wealth Management
Reported net income was $262 million, a decrease of $36 million or 12% from the prior year, and adjusted net income was $263 million, a decrease of $35 million or 12%. Wealth and Asset Management reported net income was $212 million, a decrease of $9 million or 4%, and adjusted net income was $213 million, a decrease of $8 million or 3% as the inclusion of Bank of the West and higher revenue from growth in client assets was more than offset by higher underlying expenses. Insurance net income was $50 million, a decrease of $27 million or 36% from the prior year, primarily due to unfavourable market movements in the current year relative to favourable market movements in the prior year.
BMO Capital Markets
Reported net income was $489 million, an increase of $132 million or 37% from the prior year, and adjusted net income was $492 million, an increase of $129 million or 36%. Results reflected revenue growth of 19%, with higher revenue in both Global Markets and Investment and Corporate Banking, partially offset by higher expenses and a higher provision for credit losses, compared with a recovery in the prior year.
Corporate Services
Reported net loss was $757 million, compared with reported net income of $2,251 million in the prior year, and adjusted net loss was $311 million, compared with adjusted net loss of $104 million.
Capital
BMO's Common Equity Tier 1 (CET1) Ratio was 12.5% as at October 31, 2023, an increase from 12.3% at the end of the third quarter of 2023, primarily due to internal capital generation and common shares issued under the Dividend Reinvestment and Share Purchase Plan, partially offset by the impact of acquisition and integration costs related to Bank of the West and unrealized losses on fair value through other comprehensive income securities.
Credit Quality
Total provision for credit losses was $446 million, compared with a provision of $226 million in the prior year. The provision for credit losses on impaired loans was $408 million, an increase of $216 million from the prior year. The provision for credit losses on performing loans was $38 million, an increase of $4 million from the prior year.
Refer to the Critical Accounting Estimates and Judgments section of BMO's 2023 Annual Report and Note 4 of our audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2023.
Caution
The foregoing sections contain forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Regulatory Filings
BMO's continuous disclosure materials, including interim filings, annual Management's Discussion and Analysis and audited annual consolidated financial statements, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular, are available on our website at www.bmo.com/investorrelations, on the Canadian Securities Administrators' website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov. Information contained in or otherwise accessible through our website (www.bmo.com), or any third-party websites mentioned herein, does not form part of this document.
| Bank of Montreal uses a unified branding approach that links all of the organization's member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. In this document, the names BMO and BMO Financial Group, as well as the words "bank", "we" and "our", mean Bank of Montreal, together with its subsidiaries. |
Financial Review
Management's Discussion and Analysis (MD&A) commentary is as at December 1, 2023. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended October 31, 2023, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2023, and the MD&A for fiscal 2023, contained in BMO's 2023 Annual Report.
BMO's 2023 Annual Report includes a comprehensive discussion of its businesses, strategies and objectives, and can be accessed on our website at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.
Bank of Montreal's management, under the supervision of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at October 31, 2023, of Bank of Montreal's disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.
There were no changes in our internal control over financial reporting during the quarter ended October 31, 2023, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.
As in prior quarters, Bank of Montreal's Audit and Conduct Review Committee reviewed this document and Bank of Montreal's Board of Directors approved the document prior to its release.
Financial Highlights
| (Canadian $ in millions, except as noted) | Q4-2023 | Q3-2023 | Q4-2022 | Fiscal 2023 | Fiscal 2022 |
| Summary Income Statement(1) (5) | |||||
| Net interest income | 4,941 | 4,905 | 3,767 | 18,681 | 15,885 |
| Non-interest revenue | 3,419 | 3,024 | 6,803 | 12,518 | 17,825 |
| Revenue | 8,360 | 7,929 | 10,570 | 31,199 | 33,710 |
| Insurance claims, commissions and changes in policy benefit liabilities (CCPB) | 151 | 4 | (369) | 1,939 | (683) |
| Revenue, net of CCPB (2) | 8,209 | 7,925 | 10,939 | 29,260 | 34,393 |
| Provision for credit losses on impaired loans | 408 | 333 | 192 | 1,180 | 502 |
| Provision for (recovery of) credit losses on performing loans | 38 | 159 | 34 | 998 | (189) |
| Total provision for credit losses (PCL) | 446 | 492 | 226 | 2,178 | 313 |
| Non-interest expense | 5,700 | 5,594 | 4,776 | 21,219 | 16,194 |
| Provision for income taxes | 446 | 385 | 1,454 | 1,486 | 4,349 |
| Net income | 1,617 | 1,454 | 4,483 | 4,377 | 13,537 |
| Net income available to common shareholders | 1,485 | 1,411 | 4,406 | 4,034 | 13,306 |
| Adjusted net income | 2,150 | 2,037 | 2,136 | 8,675 | 9,039 |
| Adjusted net income available to common shareholders | 2,018 | 1,994 | 2,059 | 8,332 | 8,808 |
| Common Share Data ($, except as noted) (1) | |||||
| Basic earnings per share | 2.07 | 1.97 | 6.52 | 5.69 | 20.04 |
| Diluted earnings per share | 2.06 | 1.97 | 6.51 | 5.68 | 19.99 |
| Adjusted diluted earnings per share | 2.81 | 2.78 | 3.04 | 11.73 | 13.23 |
| Book value per share | 97.17 | 93.79 | 95.60 | 97.17 | 95.60 |
| Closing share price | 104.79 | 122.54 | 125.49 | 104.79 | 125.49 |
| Number of common shares outstanding (in millions) | |||||
| End of period | 720.9 | 716.7 | 677.1 | 720.9 | 677.1 |
| Average basic | 719.2 | 715.4 | 676.1 | 709.4 | 664.0 |
| Average diluted | 720.0 | 716.4 | 677.5 | 710.5 | 665.7 |
| Market capitalization ($ billions) | 75.5 | 87.8 | 85.0 | 75.5 | 85.0 |
| Dividends declared per share | 1.47 | 1.47 | 1.39 | 5.80 | 5.44 |
| Dividend yield (%) | 5.6 | 4.8 | 4.4 | 5.5 | 4.3 |
| Dividend payout ratio (%) | 71.1 | 74.6 | 21.3 | 102.0 | 27.1 |
| Adjusted dividend payout ratio (%) | 52.3 | 52.7 | 45.6 | 49.4 | 41.0 |
| Financial Measures and Ratios (%) (1) | |||||
| Return on equity | 8.6 | 8.3 | 27.6 | 6.0 | 22.9 |
| Adjusted return on equity | 11.7 | 11.7 | 12.9 | 12.3 | 15.2 |
| Return on tangible common equity | 12.5 | 11.9 | 30.1 | 8.2 | 25.1 |
| Adjusted return on tangible common equity | 16.0 | 15.8 | 14.0 | 15.8 | 16.6 |
| Efficiency ratio | 68.2 | 70.6 | 45.2 | 68.0 | 48.0 |
| Adjusted efficiency ratio, net of CCPB (2) | 60.8 | 61.6 | 57.2 | 59.8 | 55.8 |
| Operating leverage | (40.2) | (14.9) | 35.3 | (38.5) | 19.6 |
| Adjusted operating leverage, net of CCPB (2) | (7.3) | (10.4) | 0.4 | (8.2) | 1.3 |
| Net interest margin on average earning assets | 1.66 | 1.68 | 1.46 | 1.63 | 1.62 |
| Net interest margin on average earning assets excluding trading revenue and trading assets | 1.87 | 1.90 | 1.56 | 1.82 | 1.72 |
| Effective tax rate | 21.62 | 20.92 | 24.49 | 25.34 | 24.31 |
| Adjusted effective tax rate | 22.65 | 21.85 | 21.83 | 22.33 | 22.80 |
| Total PCL-to-average net loans and acceptances | 0.27 | 0.30 | 0.16 | 0.35 | 0.06 |
| PCL on impaired loans-to-average net loans and acceptances | 0.25 | 0.21 | 0.14 | 0.19 | 0.10 |
| Liquidity coverage ratio (LCR) (3) | 128 | 131 | 135 | 128 | 135 |
| Net stable funding ratio (NSFR) (3) | 115 | 114 | 114 | 115 | 114 |
| Balance Sheet and other information(as at October 31, $ millions, except as noted) | |||||
| Assets | 1,293,276 | 1,248,554 | 1,139,199 | 1,293,276 | 1,139,199 |
| Average earning assets | 1,177,770 | 1,161,226 | 1,021,540 | 1,145,632 | 979,341 |
| Gross loans and acceptances | 668,396 | 643,911 | 567,191 | 668,396 | 567,191 |
| Net loans and acceptances | 664,589 | 640,391 | 564,574 | 664,589 | 564,574 |
| Deposits | 909,676 | 883,569 | 769,478 | 909,676 | 769,478 |
| Common shareholders' equity | 70,051 | 67,215 | 64,730 | 70,051 | 64,730 |
| Total risk weighted assets (4) | 424,197 | 412,943 | 363,997 | 424,197 | 363,997 |
| Assets under administration | 808,985 | 774,760 | 744,442 | 808,985 | 744,442 |
| Assets under management | 332,947 | 340,184 | 305,462 | 332,947 | 305,462 |
| Capital Ratios (%) (4) | |||||
| Common Equity Tier 1 Ratio | 12.5 | 12.3 | 16.7 | 12.5 | 16.7 |
| Tier 1 Capital Ratio | 14.1 | 14.0 | 18.4 | 14.1 | 18.4 |
| Total Capital Ratio | 16.2 | 16.1 | 20.7 | 16.2 | 20.7 |
| Leverage Ratio | 4.2 | 4.2 | 5.6 | 4.2 | 5.6 |
| TLAC Ratio | 27.0 | 26.8 | 33.1 | 27.0 | 33.1 |
| Foreign Exchange Rates ($) | |||||
| As at October 31, Canadian/U.S. dollar | 1.3868 | 1.3177 | 1.3625 | 1.3868 | 1.3625 |
| Average Canadian/U.S. dollar | 1.3648 | 1.3331 | 1.3516 | 1.3492 | 1.2918 |
| (1) | Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the above table. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. Revenue, net of CCPB, as well as reported ratios calculated net of CCPB, and adjusted results, measures and ratios in this table are non-GAAP amounts. For further information, refer to the Non-GAAP and Other Financial Measures section; for details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms. |
| (2) | We present revenue, efficiency ratio and operating leverage on a basis that is net of CCPB, which reduces the variability in insurance revenue resulting from changes in fair value that are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. For further information, refer to the Insurance Claims, Commissions and Changes in Policy Benefits section. |
| (3) | LCR and NSFR are disclosed in accordance with the Liquidity Adequacy Requirements (LAR) Guideline as set out by Office of the Superintendent of Financial Institutions (OSFI), as applicable. |
| (4) | Capital ratios and risk–weighted assets are disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by OSFI, as applicable. |
| (5) | Due to the increase in the bank's investments in Low Income Housing Tax Credit (LIHTC) entities following our acquisition of Bank of the West, we have updated our accounting policy related to the presentation of returns from these investments in the consolidated statement of income. As a result, amounts previously recorded in non-interest expense and provision for income taxes are both recorded in non-interest revenue. Fiscal 2023 comparatives have been reclassified to conform with the current period's methodology. The impact in fiscal 2022 was not material. |
Non-GAAP and Other Financial Measures
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non–GAAP basis, as described below. We believe that these non–GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.
Non–GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.
Further information regarding the composition of our non-GAAP and other financial measures, including supplementary financial measures, is provided in the Glossary of Financial Terms and available online at www.bmo.com/investorrelations and at www.sedarplus.ca.
Our non–GAAP measures broadly fall into the following categories:
Adjusted measures and ratios
Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non–interest expense, provision for credit losses and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non–GAAP amounts. Presenting results on both a reported basis and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing business performance. As such, the presentation may facilitate readers' analysis of trends. Except as otherwise noted, management's discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.
Measures net of insurance claims, commissions and changes in policy benefit liabilities
We also present reported and adjusted revenue on a basis that is net of insurance claims, commissions and changes in policy benefit liabilities (CCPB), and our efficiency ratio and operating leverage are calculated on a similar basis. Measures and ratios presented on a basis net of CCPB are non-GAAP amounts. Insurance revenue can experience variability arising from fluctuations in the fair value of insurance assets caused by movements in interest rates and equity markets. The investments that support policy benefit liabilities are predominantly fixed income assets recorded at fair value, with changes in fair value recorded in insurance revenue in the Consolidated Statement of Income. These fair value changes are largely offset by changes in the fair value of policy benefit liabilities, the impact of which is reflected in CCPB. The presentation and discussion of revenue, efficiency ratios and operating leverage on a net basis reduces this variability, which allows for a better assessment of operating results. For more information, refer to the Insurance Claims, Commissions and Changes in Policy Benefit Liabilities section.
Tangible common equity and return on tangible common equity
Tangible common equity is calculated as common shareholders' equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity is commonly used in the North American banking industry and is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed organically.
Caution
This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Non-GAAP and Other Financial Measures
| (Canadian $ in millions, except as noted) | Q4-2023 | Q3-2023 | Q4-2022 | Fiscal 2023 | Fiscal 2022 |
| Reported Results | |||||
| Net interest income | 4,941 | 4,905 | 3,767 | 18,681 | 15,885 |
| Non-interest revenue | 3,419 | 3,024 | 6,803 | 12,518 | 17,825 |
| Revenue | 8,360 | 7,929 | 10,570 | 31,199 | 33,710 |
| Insurance claims, commissions and changes in policy benefit liabilities (CCPB) | (151) | (4) | 369 | (1,939) | 683 |
| Revenue, net of CCPB | 8,209 | 7,925 | 10,939 | 29,260 | 34,393 |
| Provision for credit losses | (446) | (492) | (226) | (2,178) | (313) |
| Non-interest expense | (5,700) | (5,594) | (4,776) | (21,219) | (16,194) |
| Income before income taxes | 2,063 | 1,839 | 5,937 | 5,863 | 17,886 |
| Provision for income taxes | (446) | (385) | (1,454) | (1,486) | (4,349) |
| Net income | 1,617 | 1,454 | 4,483 | 4,377 | 13,537 |
| Diluted EPS ($) | 2.06 | 1.97 | 6.51 | 5.68 | 19.99 |
| Adjusting Items Impacting Revenue (Pre-tax) | |||||
| Impact of divestitures (1) | - | - | - | - | (21) |
| Management of fair value changes on the purchase of Bank of the West (2) | - | - | 4,541 | (2,011) | 7,713 |
| Legal provision (including related interest expense and legal fees) (3) | (14) | (3) | (515) | (30) | (515) |
| Impact of Canadian tax measures (4) | - | (138) | - | (138) | - |
| Impact of adjusting items on revenue (pre-tax) | (14) | (141) | 4,026 | (2,179) | 7,177 |
| Adjusting Items Impacting Provision for Credit Losses (Pre-tax) | |||||
| Initial provision for credit losses on purchased performing loans (pre-tax) (5) | - | - | - | (705) | - |
| Adjusting Items Impacting Non-Interest Expense (Pre-tax) | |||||
| Acquisition and integration costs (6) | (582) | (497) | (193) | (2,045) | (326) |
| Amortization of acquisition-related intangible assets (7) | (119) | (115) | (8) | (357) | (31) |
| Impact of divestitures (1) | - | - | 6 | - | (16) |
| Legal provision (including related interest expense and legal fees) (3) | (2) | 7 | (627) | 3 | (627) |
| Impact of Canadian tax measures (4) | - | (22) | - | (22) | - |
| Impact of adjusting items on non-interest expense (pre-tax) | (703) | (627) | (822) | (2,421) | (1,000) |
| Impact of adjusting items on reported net income (pre-tax) | (717) | (768) | 3,204 | (5,305) | 6,177 |
| Adjusting Items Impacting Revenue (After-tax) | |||||
| Impact of divestitures (1) | - | - | - | - | (23) |
| Management of fair value changes on the purchase of Bank of the West (2) | - | - | 3,336 | (1,461) | 5,667 |
| Legal provision (including related interest expense and legal fees) (3) | (10) | (2) | (382) | (23) | (382) |
| Impact of Canadian tax measures (4) | - | (115) | - | (115) | - |
| Impact of adjusting items on revenue (after-tax) | (10) | (117) | 2,954 | (1,599) | 5,262 |
| Adjusting Items Impacting Provision for Credit Losses (After-tax) | |||||
| Initial provision for credit losses on purchased performing loans (after-tax) (5) | - | - | - | (517) | - |
| Adjusting Items Impacting Non-Interest Expense (After-tax) | |||||
| Acquisition and integration costs (6) | (433) | (370) | (145) | (1,533) | (245) |
| Amortization of acquisition-related intangible assets (7) | (88) | (85) | (6) | (264) | (23) |
| Impact of divestitures (1) | - | - | 8 | - | (32) |
| Legal provision (including related interest expense and legal fees) (3) | (2) | 5 | (464) | 2 | (464) |
| Impact of Canadian tax measures (4) | - | (16) | - | (16) | - |
| Impact of adjusting items on non-interest expense (after-tax) | (523) | (466) | (607) | (1,811) | (764) |
| Adjusting Items Impacting Provision for Income Taxes (After-tax) | |||||
| Impact of Canadian tax measures (4) | - | - | - | (371) | - |
| Impact of adjusting items on reported net income (after-tax) | (533) | (583) | 2,347 | (4,298) | 4,498 |
| Impact on diluted EPS ($) | (0.75) | (0.81) | 3.47 | (6.05) | 6.76 |
| Adjusted Results | |||||
| Net interest income | 4,955 | 4,908 | 4,439 | 19,094 | 16,352 |
| Non-interest revenue | 3,419 | 3,162 | 2,105 | 14,284 | 10,181 |
| Revenue | 8,374 | 8,070 | 6,544 | 33,378 | 26,533 |
| Insurance claims, commissions and changes in policy benefit liabilities (CCPB) | (151) | (4) | 369 | (1,939) | 683 |
| Revenue, net of CCPB | 8,223 | 8,066 | 6,913 | 31,439 | 27,216 |
| Provision for credit losses | (446) | (492) | (226) | (1,473) | (313) |
| Non-interest expense | (4,997) | (4,967) | (3,954) | (18,798) | (15,194) |
| Income before income taxes | 2,780 | 2,607 | 2,733 | 11,168 | 11,709 |
| Provision for income taxes | (630) | (570) | (597) | (2,493) | (2,670) |
| Net income | 2,150 | 2,037 | 2,136 | 8,675 | 9,039 |
| Diluted EPS ($) | 2.81 | 2.78 | 3.04 | 11.73 | 13.23 |
| (1) | Reported net income in fiscal 2022 included the impact of divestitures related to the sale of our EMEA and U.S. Asset Management businesses: Q4-2022 included a $8 million ($6 million pre-tax) recovery of non-interest expense; Q3-2022 included non-interest expense of $6 million ($7 million pre-tax); Q2-2022 included a loss of $9 million ($10 million pre-tax), comprising a gain of $8 million related to the transfer of certain U.S. asset management clients recorded in non-interest revenue and non-interest expense of $18 million; and Q1-2022 included a loss of $48 million ($26 million pre-tax), comprising a $29 million loss related to foreign currency translation reclassified from accumulated other comprehensive income to non-interest revenue, and a $3 million net recovery of non-interest expense, including taxes of $22 million on the closing of the sale of our EMEA Asset Management businesses. These amounts were recorded in Corporate Services. |
| (2) | Reported net income included revenue (losses) related to the acquisition of Bank of the West resulting from the management of the impact of interest rate changes between the announcement and closing of the acquisition on its fair value and goodwill:Q1-2023 included a loss of $1,461 million ($2,011 million pre-tax), comprising $1,628 million of mark-to-market losses on certain interest rate swaps recorded in non-interest trading revenue and $383 million of losses on a portfolio of primarily U.S. treasuries and other balance sheet instruments recorded in net interest income; Q4-2022 included revenue of $3,336 million ($4,541 million pre-tax), comprising $4,698 million of mark-to-market gains and $157 million of net interest losses; Q3-2022 included a loss of $694 million ($945 million pre-tax), comprising $983 million of mark-to-market losses and $38 million of net interest income; Q2-2022 included revenue of $2,612 million ($3,555 million pre-tax), comprising $3,433 million of mark-to-market gains and $122 million pre-tax net interest income; and Q1-2022 included revenue of $413 million ($562 million pre-tax), comprising $517 million of mark-to-market gains and $45 million of net interest income. These amounts were recorded in Corporate Services. For further information on this acquisition, refer to the Recent Acquisitions section. |
| (3) | Reported net income included the impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank: Q4-2023 included $12 million ($16 million pre-tax), comprising interest expense of $14 million and non-interest expense of $2 million; Q3-2023 included a net recovery of $3 million ($4 million pre-tax), comprising interest expense of $3 million and a non-interest expense recovery of $7 million; Q2-2023 included interest expense of $6 million ($7 million pre-tax); Q1-2023 included $6 million ($8 million pre-tax), comprising interest expense of $6 million and non-interest expense of $2 million; and Q4-2022 included a legal provision of $846 million ($1,142 million pre-tax), comprising interest expense of $515 million and non-interest expense of $627 million. These amounts were recorded in Corporate Services. For further information, refer to the Provisions and Contingent Liabilities section in Note 24 of the audited annual consolidated financial statements of BMO's 2023 Annual Report. |
| (4) | Reported net income included the impact of certain tax measures enacted by the Canadian government: Q3-2023 included a charge of $131 million ($160 million pre-tax) related to the amended GST/HST definition for financial services, comprising $138 million recorded in non-interest revenue and $22 million recorded in non-interest expense; and Q1-2023 included a one-time tax expense of $371 million, comprising a Canada Recovery Dividend (CRD) of $312 million and $59 million related to the pro-rated fiscal 2022 impact of the 1.5% tax rate increase, net of a deferred tax asset remeasurement. These amounts were recorded in Corporate Services. |
| (5) | Reported net income in Q2-2023 included an initial provision for credit losses of $517 million ($705 million pre-tax) on the purchased Bank of the West performing loan portfolio, recorded in Corporate Services. |
| (6) | Reported net income included acquisition and integration costs, recorded in non-interest expense. Costs related to the acquisition of Bank of the West were recorded in Corporate Services: In fiscal 2023, Q4-2023 included $434 million ($583 million pre-tax), Q3-2023 included $363 million ($487 million pre-tax), Q2-2023 included $545 million ($722 million pre-tax), and Q1-2023 included $178 million ($235 million pre-tax); and in fiscal 2022, Q4-2022 included $143 million ($191 million pre-tax), Q3-2022 included $61 million ($82 million pre-tax), Q2-2022 included $26 million ($35 million pre-tax) and Q1-2022 included $7 million ($8 million pre-tax). Costs related to the acquisitions of Radicle and Clearpool were recorded in BMO Capital Markets: In fiscal 2023, Q4-2023 included a recovery of $2 million ($3 million pre-tax), Q3-2023 included $1 million ($2 million pre-tax), Q2-2023 included $2 million ($2 million pre-tax), Q1-2023 included $3 million ($4 million pre-tax); and in fiscal 2022, Q4-2022 included $2 million ($2 million pre-tax), Q3-2022 included $1 million ($2 million pre-tax), Q2-2022 included $2 million ($2 million pre-tax) and Q1-2022 included $3 million ($4 million pre-tax). Costs related to the acquisition of AIR MILES were recorded in Canadian P&C: In fiscal 2023, Q4-2023 included $1 million ($2 million pre-tax), Q3-2023 included $6 million ($8 million pre-tax) and Q2-2023 included $2 million ($3 million pre-tax). |
| (7) | Reported net income included amortization of acquisition-related intangible assets recorded in non-interest expense in the related operating group:Q4-2023 included $88 million ($119 million pre-tax), Q3-2023 and Q2-2023 both included $85 million ($115 million pre-tax); Q1-2023 included $6 million ($8 million pre-tax); Q4-2022 included $6 million ($8 million pre-tax); Q3-2022 included $5 million ($7 million pre-tax); and Q2-2022 and Q1-2022 both included $6 million ($8 million pre-tax). |
Summary of Reported and Adjusted Results by Operating Segment
| BMO Wealth | BMO Capital | Corporate | U.S. Segment (1) | |||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. P&C | Total P&C | Management | Markets | Services | Total Bank | (US$ in millions) |
| Q4-2023 | ||||||||
| Reported net income (loss) | 962 | 661 | 1,623 | 262 | 489 | (757) | 1,617 | 388 |
| Acquisition and integration costs | 1 | - | 1 | - | (2) | 434 | 433 | 317 |
| Amortization of acquisition-related intangible assets | 3 | 79 | 82 | 1 | 5 | - | 88 | 61 |
| Legal provision (including related interest expense | ||||||||
| and legal fees) | - | - | - | - | - | 12 | 12 | 8 |
| Adjusted net income (loss) | 966 | 740 | 1,706 | 263 | 492 | (311) | 2,150 | 774 |
| Q3-2023 | ||||||||
| Reported net income (loss) | 915 | 576 | 1,491 | 303 | 310 | (650) | 1,454 | 364 |
| Acquisition and integration costs | 6 | - | 6 | - | 1 | 363 | 370 | 275 |
| Amortization of acquisition-related intangible assets | 2 | 77 | 79 | 1 | 5 | - | 85 | 60 |
| Legal provision (including related interest expense | ||||||||
| and legal fees) | - | - | - | - | - | (3) | (3) | (2) |
| Impact of Canadian tax measures | - | - | - | - | - | 131 | 131 | - |
| Adjusted net income (loss) | 923 | 653 | 1,576 | 304 | 316 | (159) | 2,037 | 697 |
| Q4-2022 | ||||||||
| Reported net income | 917 | 660 | 1,577 | 298 | 357 | 2,251 | 4,483 | 2,306 |
| Acquisition and integration costs | - | - | - | -   Relax outdoor di alta qualità, soluzioni tecniche ed impiantistiche all’avanguardia per aree di comfort esclusive Bergamo, 6 settembre 2024. Le piscine in acciaio inox sono la soluzione ottimale per una pausa rilassante e rinfrescante nelle calde giornate estive. Realizzate con materiali di alta qualità, sono particolarmente adatte per essere installate negli spazi outdoor di residenze private, strutture alberghiere, agriturismi e centri benessere. “Innovazione e ricerca costanti ci consentono di offrire soluzioni tecniche ed impiantistiche all’avanguardia, trasformando gli ambienti in aree di comfort esclusive”, afferma Gaudenzio Daminelli, CEO e Founder dell’azienda iDaminelli di Bergamo. “I vantaggi delle piscine costruite con pannelli in acciaio inossidabile sono davvero molteplici: innanzitutto la praticità, possono essere installate fuori terra, semi-interrate o interrate ed in qualsiasi tipo di terreno; potrebbero addirittura essere evitate opere murarie in caso di stringenti normative comunali. Altro fattore rilevante è la resistenza dell'acciaio agli agenti atmosferici e all’usura quotidiana, ciò assicura durevolezza nel tempo, riducendo i costi di manutenzione e garantendo un investimento a lungo termine. Oltre a tutti questi vantaggi, è importante sottolineare che il prodotto viene installato ‘chiavi in mano’ con la massima cura e professionalità da parte del nostro team specializzato che rilascia la certificazione dell'azienda produttrice attestante la massima qualità ed affidabilità del prodotto installato. La visione innovativa e cosmopolita dell’azienda iDaminelli di Bergamo apre ad una nuova concezione dell’abitare, dove gli spazi interni convivono in perfetta armonia con gli ambienti esterni, creando un ‘continuum’ di stile ed eleganza. L’esclusività delle piscine firmate iDaminelli traspare dalla scelta dei materiali, selezionati con cura e certificati, che rendono ciascun pezzo unico ed irripetibile, simbolo di un lifestyle all’insegna del welness e dell’eleganza. “Dal punto di vista estetico, queste piscine offrono indubbiamente un design moderno e raffinato, integrandosi perfettamente in qualsiasi contesto architettonico e paesaggistico. La possibilità di personalizzare la forma e le dimensioni permette di creare uno spazio su misura per le esigenze specifiche di ogni cliente”, spiega Paolo Daminelli, Co-Manager associated. “Ogni nostra piscina può essere completata con una varietà di optional quali: sistemi di idromassaggio, illuminazione, nuoto controcorrente e riscaldamento acqua per garantire una temperatura ideale in ogni stagione. Integriamo inoltre sistemi di gestione automatica per monitorare i valori dell’acqua, automatizzare la pulizia della vasca e consentire il controllo remoto, offrendo una gestione completa e intelligente dello spazio acquatico”. La crescente competenza tecnica ha spinto l’azienda bergamasca ad esplorare nuove frontiere nel design e nell'innovazione, in particolare nei settori dei tendaggi e degli accessori per l'arredamento hi-tech degli spazi esterni: tende da sole, vele ombreggianti, pergole bioclimatiche ed inclinate, pensiline, pavimenti e vetrate. Un ampio contenitore di idee che si distingue nel panorama del design e che mira a soddisfare ogni esigenza per vivere gli ambienti in armonia con la natura del luogo. Contatti: https://www.idaminelli.it/   MADRID, SPAIN - Media OutReach Newswire - 6 September 2024 - OPPO has announced that it has renewed its partnership with the Union of European Football Associations (UEFA) for the next three seasons, covering multiple UEFA competitions including the UEFA Champions League, UEFA Super Cup, UEFA Futsal Champions League finals and the UEFA Youth League finals. Building on the partnership of the previous two seasons, OPPO will continue to leverage its cutting-edge technologies across smartphones, headphones and smartwatches to connect fans closer to the football match and deliver exceptional viewing experiences in collaboration with UEFA. OPPO and UEFA celebrate partnership renewal OPPO made the announcement of the partnership renewal as Official Smartphone Product Partner together with UEFA at a dedicated event attended by Billy Zhang, President of Overseas MKT, Sales and Service at OPPO, and Guy-Laurent Epstein, Marketing Director at UEFA. Football legend Iker Casillas Fernández also made a surprise appearance at the event, where he met with fans and demonstrated the latest OPPO products and AI technology. Billy Zhang, President of Overseas MKT, Sales and Service at OPPO, said "Our collaboration with UEFA over the past two years has highlighted our shared values in connecting and inspiring fans of all generations. We look forward to continuing to strengthen our partnership over the next three years, connecting fans closer to the match through OPPO's innovations in imaging and AI technologies, and dedicating more resources to helping young players and the broader global football community experience the magic of football." Guy-Laurent Epstein, UEFA marketing director, said: "Over the past two seasons, OPPO smartphones and technologies have uplifted the UEFA Champions League experience for fans worldwide with their advanced imaging and AI capabilities. We now look forward to building further on our collaboration to ensure that more people can feel the passion of football and be inspired by the UEFA Champions League." Empowering the UEFA Champions League with mobile imaging and AI technologies With over a decade of expertise in mobile imaging technology, OPPO has created the Matchday Phone for football fans. Combining outstanding telephoto and nighttime photography, OPPO smartphones help fans capture exciting moments in the stadium, delivering clear shots from high up in the stands and capturing vivid colors and details during evening matches. To bring fans closer to the excitement of football, OPPO also invited football legend Iker Casillas Fernández to demonstrate the latest OPPO AI Studio feature during the partnership renewal event. Over the next three seasons, OPPO will also continue to enhance fan interaction across multiple football touchpoints through ongoing innovation in AI technology and generative AI features such as AI Studio and AI Eraser.  Iker Casillas Fernández Experiences the AI Studio Feature
OPPO's ongoing commitment to sports philanthropy In the coming seasons, OPPO will extend its commitment to football globally by launching a number of youth football development programs worldwide, including in Spain, Mexico, Egypt, and China. Through these initiatives, OPPO and UEFA will provide resources and support to young footballers and community football clubs, inspiring them to chase their football dreams. During the past two years of collaboration, OPPO has captured and celebrated countless epic moments from the UEFA Champions League using its powerful imaging technology. Under the renewed partnership, OPPO will continue to work closely with UEFA over the next three seasons to provide more fans with opportunities to enjoy football matches and experience how OPPO technology enhances the excitement of UEFA competitions. About OPPO OPPO is a leading global smart device brand. Since the launch of its first mobile phone – "Smiley Face" - in 2008, OPPO has been in relentless pursuit of the perfect synergy of aesthetic satisfaction and innovative technology. Today, OPPO provides a wide range of smart devices spearheaded by the Find and Reno series. Beyond devices, OPPO also provides its users with ColorOS operating system and internet services such as OPPO Cloud and OPPO+. OPPO has footprints in more than 60 countries and regions, with more than 40,000 employees dedicated to creating a better life for customers around the world.  
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